Correlation Between Western Copper and JAPAN TOBACCO
Can any of the company-specific risk be diversified away by investing in both Western Copper and JAPAN TOBACCO at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Western Copper and JAPAN TOBACCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper and and JAPAN TOBACCO UNSPADR12, you can compare the effects of market volatilities on Western Copper and JAPAN TOBACCO and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Western Copper with a short position of JAPAN TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and JAPAN TOBACCO.
Diversification Opportunities for Western Copper and JAPAN TOBACCO
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and JAPAN is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and JAPAN TOBACCO UNSPADR12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN TOBACCO UNSPADR12 and Western Copper is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Western Copper and are associated (or correlated) with JAPAN TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAPAN TOBACCO UNSPADR12 has no effect on the direction of Western Copper i.e., Western Copper and JAPAN TOBACCO go up and down completely randomly.
Pair Corralation between Western Copper and JAPAN TOBACCO
Assuming the 90 days trading horizon Western Copper is expected to generate 6.14 times less return on investment than JAPAN TOBACCO. In addition to that, Western Copper is 2.85 times more volatile than JAPAN TOBACCO UNSPADR12. It trades about 0.01 of its total potential returns per unit of risk. JAPAN TOBACCO UNSPADR12 is currently generating about 0.16 per unit of volatility. If you would invest 1,200 in JAPAN TOBACCO UNSPADR12 on September 14, 2024 and sell it today you would earn a total of 60.00 from holding JAPAN TOBACCO UNSPADR12 or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. JAPAN TOBACCO UNSPADR12
Performance |
| Timeline |
| Western Copper |
| JAPAN TOBACCO UNSPADR12 |
Western Copper and JAPAN TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and JAPAN TOBACCO
The main advantage of trading using opposite Western Copper and JAPAN TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, JAPAN TOBACCO can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in JAPAN TOBACCO will offset losses from the drop in JAPAN TOBACCO's long position.| Western Copper vs. BHP Group Limited | Western Copper vs. Vale SA | Western Copper vs. Superior Plus Corp | Western Copper vs. SIVERS SEMICONDUCTORS AB |
| JAPAN TOBACCO vs. British American Tobacco | JAPAN TOBACCO vs. British American Tobacco | JAPAN TOBACCO vs. Japan Tobacco |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |